October - December 2013
The Word on the Street
By Jason Jensen
Across the state demand for Missouri wood products finished out the year very strong. Markets appear to have at least recovered if not surpassed markets prior to the economic downturn. This is good news for landowners who may have been waiting for markets to improve. Demand for nearly all products is good. Consumers are finally starting to realize that hickory cabinets and flooring have a lot of character and are very beautiful. As a result there is an increasing demand for good hickory. Red oak markets in the northern part of the state have finally picked back up. This has been a long time coming for foresters and landowners wanting to sell red oak in the north. While pine markets aren't strong, there is a variety of pine products being sold including posts, poles, shavings logs, cants, and even an increasing number of pallets being built from pine. This is good news for landowners with pine. Pine markets have been sporadic at best for the last 15 years or more. A sustainable pine market is critical to maintaining the health and productivity of much of our southern Missouri forests. Stave quality white oak and nearly any quality of walnut continue to be in high demand.
In the southern part of the state, markets for nearly all products are good. Every product is in high demand. Grade markets have improved to the point where there may even be a few railroad ties being sawn down into lumber. Flooring and pallet markets continue to be strong as well.
One of the biggest problems affecting nearly every mill in the state, is the lack of log inventory. In 2008 when the economy crashed, many loggers either retired or found another occupation. Now that the economy has picked back up, the logging infrastructure is no longer adequate to respond and increase production. There is an increasing interest in mechanized equipment to compensate for the lack of available loggers. Many mills went into fall and winter with low log inventories. That is not a good situation especially if December is any indication of how the rest of the winter will be.
Competition is intense for standing timber in the southern part of the state. Competition is responsible for driving up stumpage prices in many areas. It is not uncommon to have eight or more bidders for timber sales in some southern counties. This can be a double edged sword. It is good if you are a landowner selling standing timber because increased competition equals increased prices. It can also be bad since increased pressure is placed on the forest resource.
I am often asked why we don't report certain products. My goal is to make this report the best and most inclusive of all species and products that I can. The reason that we don't include products such as cedar, posts, utility poles, scragg blocks, pulpwood and sometimes even staves is because of the lack of reports that we receive for those products. This report is published based on stumpage prices that are received from foresters. If we don't receive reports, then we can't report that particular product. As always, readers should realize that this report only provides a snapshot of the markets. It is not meant to be indicative of what you should (or shouldn't) receive for your timber at any particular time. Ultimately what the landowner is willing to accept and what the buyer is willing to pay is what your timber is worth at any particular time.